The short answer
- Check the benefits that ignore savings firstAttendance Allowance, PIP and DLA do not look at what your parent has in the bank, so claim what is available before spending any of it. The Disabled Facilities Grant is the exception, means-tested but with a £6,000 threshold rather than nothing.
- Four places the rest can come fromSavings, the house through equity release or downsizing, investments outside a pension, and family. Each moves at a different speed, and each has its own thing to watch for.
- How you hire the carer matters as much as how you fund itCarers on PrimeCarers charge £18 to £25 an hour with our fee included, against £28 to £35 for an agency covering the same visit.
- Get advice before the big decisions, not afterEquity release, a large family loan and a Lasting Power of Attorney all go more smoothly when they are done properly the first time, rather than undone and redone later.
Benefit, tax and grant figures are 2026/27 rates from gov.uk, checked 4 September 2026. Carer rates are what families pay on PrimeCarers, with our fee included.
Where the money comes from
Four ways to pay for care privately, and how they compare
Almost nobody funds care from a single source. Most families draw on more than one of the four below, in whatever order costs them least at the time. None of them is right or wrong on its own; each suits a different situation, and how quickly you need the money often decides which one goes first.
Savings and pension income
Spend down cash savings, or use pension income beyond day-to-day living costs.
- Speed
- Days
- Reversible
- Fully, until it is spent
Keep an emergency fund back; a large one-off cost or a boiler breaking should not depend on the same pot as the carer.
Equity release or downsizing
Borrow against the house without moving (equity release), or sell it and buy something smaller.
- Speed
- Weeks to months
- Reversible
- Downsizing yes; equity release no, once taken
Equity release reduces what is left for inheritance and the interest compounds. Both need independent financial advice.
Shares, bonds and ISAs
Sell investments outside a pension and draw the proceeds.
- Speed
- Days to weeks
- Reversible
- Fully, until sold
Gains above £3,000 a year outside an ISA can be taxed. Selling gradually across tax years keeps more of it.
Contributions from family
Children or a partner contribute a lump sum or a regular amount, as a gift or a documented loan.
- Speed
- As soon as it is agreed
- Reversible
- A loan can be pursued in the will; a gift cannot
Write it down. An undocumented family loan is very hard to recover, and an undocumented gift can look like something else if the council ever assesses savings.
A council care needs assessment is free and worth asking for before any of this, because it may reduce what has to be funded privately, or show that your parent qualifies for help sooner than you think. Local authority funding explains how the assessment and the means test work, and self-funding care sets out what a council does and does not pay for once savings are above £23,250.
Savings and pension income
Using savings without running out
For most families this is the first place the money comes from, because it is already there and needs no application or approval. Spent with a plan, savings can cover care for years. Spent without one, they tend to run out just when they are needed most.
Worth doing
- Keep three to six months of care and living costs back as an emergency fund, so a boiler or a hospital stay does not compete with the carer's pay
- Use interest and dividends to offset the cost before touching the capital itself
- Review the plan every few months, since both care needs and the cost of meeting them tend to change
- Keep up to £20,000 a year in an ISA if some of the money is being saved rather than spent, so any growth stays tax free
Worth avoiding
- Draw down a large sum from one account in one go without checking whether a smaller, staggered withdrawal keeps a better rate on the rest
- Leave a partner's savings and pension income out of the picture when working out what is available together
- Assume the pot is unlimited once a Lasting Power of Attorney is in place; an attorney still has to manage the money in the person's best interests
- Wait until savings are nearly gone before asking the council for a financial assessment; ask as soon as it looks likely you will need one
If savings and pension income will not stretch to cover what your parent needs, the sections below cover where else the money can come from. What care costs at home sets out what different levels of care tend to cost, so the numbers you are planning around are concrete rather than a guess.
The house
Equity release and downsizing, and the difference between them
For many families the house holds more money than everything else put together. There are two ways to reach it: borrowing against it while staying put, or selling it and buying somewhere smaller. They suit different situations, and only one of them can be undone.
| Equity release | Downsizing | |
|---|---|---|
| How it works | A lifetime mortgage or home reversion plan lets you borrow against the home's value while you carry on living there. Interest usually rolls up rather than being paid monthly. | The home is sold and a smaller or cheaper one bought, releasing the difference in value as a lump sum. |
| When it is repaid | Normally when the home is eventually sold, usually after death or a permanent move into a care home | Straight away, as part of the sale |
| Effect on inheritance | Reduces what is left to leave, and the amount owed grows as the rolled-up interest builds | Reduces the estate by whatever is spent, but what is left is clear from the day it happens |
| Regulation and safeguards | FCA-regulated. Providers who belong to the Equity Release Council must offer a no negative equity guarantee, so neither you nor the estate ever owes more than the home sells for. | An ordinary house sale and purchase, handled by an estate agent and a conveyancing solicitor |
| Get advice from | An FCA-regulated financial adviser who specialises in equity release, before signing anything | An estate agent for the sale, and a solicitor for the legal side |
How it works
- Equity release
- A lifetime mortgage or home reversion plan lets you borrow against the home's value while you carry on living there. Interest usually rolls up rather than being paid monthly.
- Downsizing
- The home is sold and a smaller or cheaper one bought, releasing the difference in value as a lump sum.
When it is repaid
- Equity release
- Normally when the home is eventually sold, usually after death or a permanent move into a care home
- Downsizing
- Straight away, as part of the sale
Effect on inheritance
- Equity release
- Reduces what is left to leave, and the amount owed grows as the rolled-up interest builds
- Downsizing
- Reduces the estate by whatever is spent, but what is left is clear from the day it happens
Regulation and safeguards
- Equity release
- FCA-regulated. Providers who belong to the Equity Release Council must offer a no negative equity guarantee, so neither you nor the estate ever owes more than the home sells for.
- Downsizing
- An ordinary house sale and purchase, handled by an estate agent and a conveyancing solicitor
Get advice from
- Equity release
- An FCA-regulated financial adviser who specialises in equity release, before signing anything
- Downsizing
- An estate agent for the sale, and a solicitor for the legal side
Both routes can affect means-tested council help, equity release by changing savings, downsizing potentially by changing income if the balance is invested. Ask an adviser to check the effect before deciding.
Downsizing is a bigger step than it looks on paper, because it usually means leaving a home with decades in it. Give it time, and let your parent be part of the decision for as long as they are able to be, rather than presenting it as already settled.
Investments
Selling shares, bonds and ISAs without losing more to tax than you need to
Money held outside a pension, in shares, bonds, funds or a general investment account, is often the quickest to reach after savings themselves. Selling it can bring a tax bill, but a little planning usually keeps that bill small.
Worth doing
- Contact the investment provider first and ask how long a sale takes to clear; a share sale can take several days
- Use the £3,000 a year Capital Gains Tax allowance, spreading a large sale across more than one tax year where the amount allows it
- Move money that is not needed straight away into an ISA, where up to £20,000 a year grows free of income and capital gains tax
- Draw from a Cash ISA or Stocks and Shares ISA first where possible, since the proceeds are already tax free
Worth avoiding
- Sell everything in one tax year without checking whether spreading it reduces the Capital Gains Tax due
- Forget that transferring investments to a spouse or civil partner before selling can use both of your annual allowances
- Treat a financial adviser's fee as an unnecessary cost once more than one type of investment is involved; the tax saved usually covers it several times over
A financial adviser can often save more in tax than they charge in fees once savings, investments and property are all in the picture together. The getting advice section below covers when it is worth paying for one.
Family contributions
When family members want to help pay
Children, a partner or other relatives often want to contribute, whether as a one-off gift, a regular amount, or a loan expected back from the estate later. None of these are difficult to arrange, and all of them go more smoothly for being written down before the first payment.
- 1
Talk to everyone who might contribute, together
Before the first paymentA short conversation, or a written note about who is contributing, how much, and whether it is a gift or a loan, saves arguments later, particularly among brothers and sisters who are not contributing equally. - 2
Decide gift or loan, and put it in writing
One pageA gift is not repaid, and if the giver dies within seven years it may still count towards their inheritance tax. A loan is expected back, usually from the estate, and the note should say the amount, when it is repayable, and whether interest applies. - 3
Use the yearly gift allowances if they help
Per giver, per yearEach person can give away £3,000 a year free of inheritance tax, and can carry one unused year forward. Larger gifts fall outside the estate entirely if the giver lives 7 years after making them. - 4
Ask a solicitor to draft anything larger
For loans of more than a few thousand poundsA solicitor can write a simple, clear loan agreement that protects everyone and is easy for the executors to follow later. It costs far less than a dispute between siblings after a death.
If a parent wants to pay a son or daughter directly for the care they give, rather than for a professional carer, that is a different arrangement with its own tax and benefit rules. Can my mum pay me to care for her? covers it in full.
Benefits that are not means-tested
The money that reduces the bill regardless of savings
Before drawing on savings, the house, investments or family, check what your parent or the person needing care can claim without their savings being looked at. Attendance Allowance, PIP and DLA are not means-tested at all. The Disabled Facilities Grant is the exception below, means-tested on income and savings, but only above £6,000, so it is still worth checking. Some of these are easy to miss, and together they can cover a meaningful share of the weekly cost.
Personal Independence Payment (PIP)
Disability Living Allowance for children
Disabled Facilities Grant
Blue Badge
War Pension and Armed Forces Independence Payment
Attendance Allowance is the one families miss most often, because it is easy to assume a parent who "manages, just about" does not qualify. The test is the help they could do with, not the help they already get. Attendance Allowance: who qualifies and how to claim sets out the two rates and how to fill in the form so it is awarded, and below State Pension age Personal Independence Payment is the claim to make instead. If you are the one giving the care rather than paying for it, Carer's Allowance is worth checking too, though it is paid to you rather than to your parent, and claiming both together needs a quick check, since one can affect the other.
Making the money go further
Agencies, direct carers and introductory services compared
However the money is raised, how you hire the carer decides how far it goes. The same hours of care can cost very different amounts, depending on whether they come through an agency, a carer you find and vet yourself, or an introductory service.
| An agency | Finding a carer yourself | An introductory service | |
|---|---|---|---|
| What you pay for an hour | £28 to £35 | £16 to £18 | £18 to £25 |
| Who checks the carer | The agency, as their employee | You, yourself, unless you arrange your own checks | ID, right to work and an enhanced DBS checked before the carer appears, with an online interview |
| Who you are dealing with | A rota; the carer who comes can change | One carer you found and vetted yourself | A carer you chose and message directly |
| Cover if a carer is unavailable | Usually included, at the higher price | None, unless you arrange a second carer | None built in; many families keep a second carer's details in reserve |
What you pay for an hour
- An agency
- £28 to £35
- Finding a carer yourself
- £16 to £18
- An introductory service
- £18 to £25
Who checks the carer
- An agency
- The agency, as their employee
- Finding a carer yourself
- You, yourself, unless you arrange your own checks
- An introductory service
- ID, right to work and an enhanced DBS checked before the carer appears, with an online interview
Who you are dealing with
- An agency
- A rota; the carer who comes can change
- Finding a carer yourself
- One carer you found and vetted yourself
- An introductory service
- A carer you chose and message directly
Cover if a carer is unavailable
- An agency
- Usually included, at the higher price
- Finding a carer yourself
- None, unless you arrange a second carer
- An introductory service
- None built in; many families keep a second carer's details in reserve
Figures for September 2026. On PrimeCarers, carers set their own rate and it shows on their profile before you speak to them, and there is nothing to pay to search or message. Above about 35 hours a week, live-in care can cost less than several visits a day.
Whichever route you choose, read the contract closely before signing anything. Look for charges beyond the hourly rate, an onboarding fee, a cancellation charge, mileage, or a premium for weekends and bank holidays, and get them in writing before the first visit. On PrimeCarers, mileage is only payable if you and the carer agree it in advance in writing, setting out the rate, and carers near you show their rate, experience and reviews before you message them. With an agency, it is worth asking directly about discounts for consistent weekly hours or a longer contract, and requesting itemised invoices so you can see what each visit cost. What care costs at home has the fuller picture across all the different kinds of care, and once the hours needed pass about 35 a week, the cost of live-in care sets out when it becomes the cheaper option.
Getting it right
The professional advice and paperwork worth having in place
Most of what is on this page can be arranged without paying anyone. A few decisions are worth paying for advice on, because a mistake is expensive or hard to undo: equity release, a large family loan, or losing the ability to manage money at all.
Where advice tends to be worth the fee
0 of 6 ticked
Financial advice
Legal advice
What each of these involves is covered in more depth elsewhere: Am I legally responsible for my elderly parent? explains what an attorney can and cannot do, will writing and protecting your assets sets out what a properly drafted will includes, and solicitors' fees for a deputyship application gives an idea of what going to the Court of Protection costs.
Questions
Questions families ask about paying for care privately
There is no single cheapest source of money, but two things reliably cut the bill. Claim the benefits that are not means-tested, such as Attendance Allowance, before spending any of your own money, and choose how you hire the carer carefully, since an agency, a carer you find yourself and an introductory service charge very different amounts for the same visit. The comparison on this page sets out the difference.
No. Equity release lets you borrow against the home's value while your parent carries on living there, so nobody has to move. Downsizing is the other property route, and it does mean selling, but it is a choice rather than the only option. Equity release and downsizing compared sets out how each one works.
Carers on PrimeCarers charge £18 to £25 an hour with our fee included. An agency doing the same visit typically charges £28 to £35 an hour, and finding a carer entirely yourself, without any checks included, tends to run £16 to £18. The cost of care at home covers other kinds of visit too.
Yes, if the spending is not planned. Keep an emergency fund back for costs outside care, such as a boiler or a hospital stay, and review the plan every few months rather than assuming the pot will simply last. If savings look like they will fall towards the council's means-test threshold, ask for a financial assessment before they get there rather than after.
No. Attendance Allowance does not look at income or savings at all, and it is paid on top of the State Pension. It is worth about £76.70 or £114.60 a week depending on the level of help needed. Attendance Allowance: who qualifies and how to claim has the full detail.
Yes, and a documented loan can be simpler than a gift, because it is expected back from the estate rather than raising inheritance tax questions. Write down the amount, when it is repayable, and whether interest applies, and ask a solicitor to draft it if the sum is more than a few thousand pounds. Family contributions on this page covers gifts and loans side by side.
In England, once your parent's assessable savings fall below £23,250, the council starts contributing towards the cost of care, on a sliding scale, and below £14,250 savings are ignored entirely. The home is not counted while your parent lives in it. Self-funding care explains the means test in full.
Not always. Spending savings or claiming a benefit needs no adviser. Equity release, selling a mix of investments, or working out whether a care plan is affordable for years ahead are the moments an adviser tends to be worth the fee, because the decisions are harder to reverse and the tax and interest involved can be significant. Getting it right on this page sets out where advice pays for itself.